I argued that the report only covers the very beginning of the e-book explosion that began late last year which has radically changed the marketplace, and which will adversely affect the fortunes of the larger publishers.

That sparked a vigorous discussion in the comments, and one person (correctly) pointed out that lots of those big-selling e-books are being sold by the large publishers, that they have huge backlists which they are only beginning to digitize, and that their production costs are lower in a digital world too.

All fair points. The bestseller charts are dominated by expensive books from large publishers. And they get 52.5% of that high price they set; they’re not scraping by on 99c e-books. They’re making money. Lots of money.

Kathryn Stockett recently became the latest writer (along with Janet Evanovich) to enter the Kindle Million Club, solely on the back of her debut novel, The Help. That Kindle e-book, priced at $9.99, brought in around $5m for her publisher in the last couple of years. That’s just one sales channel in one of the digital formats. That’s just one book.

Each of the large publishers has a small army of writers bringing in lots of money. And the ongoing costs to sell these books are quite low. This isn’t a new development either. So why should they fear the digital revolution? These are just some of the reasons.

Self-publishing

The paltry digital royalties offered by large publishers will become even more of a hot-button issue as more and more readers switch to e-books – which they will do this Christmas, in their droves.

With each bookstore closure, with each customer that moves online or switches to e-books, the competitive advantage that large publishers enjoy because of their stranglehold on the print distribution network erodes.

It’s a fairer fight online, where self-publishers can match their digital reach, and undercut them on price. Right now, self-publishers are gambling that they can offset the huge loss in potential print sales with vastly increased royalty rates on e-books.

Let’s look at some numbers.

Authors with large publishers normally receive 25% net on digital sales. The real figure, after the retailer’s cut is 17.5%. After the agent takes a bite, that’s down to 14.9%. For a $9.99 e-book, the writer is going to see less than $1.50 a copy.

For a $2.99 e-book, a self-publisher gets over $2 a copy. For a $4.99 e-book, that’s around $3.50 a copy.

As the digital revolution converts more readers to e-books, and opens up new markets internationally, this huge difference in digital royalty rates will lead many more writers to go it alone.

Right now, self-publishers are capturing around a quarter of the top spots in the Kindle Store, and those numbers should increase as more promising writers pull their manuscripts from slush piles, and more experienced writers decide to self-publish.

But it’s not just self-publishers. Many e-publishers and small publishers have very equitable royalty rates. Some are posting phenomenal sales numbers. As that continues, we will see more bankable stalwarts like Joe Haldeman signing with new, progressive publishers like Ridan.

The only way I can see larger publishers stemming the flow is by increasing royalty rates – which they seem loathe to do as it would dramatically affect their profitability.

Marketing

Large publishers are geared towards marketing to their customers: bookstores. Selling to readers is a completely different game, requiring expertise in leveraging social media that publishers simply don’t have.

For several years, the burden of promotion has been shifting to the author – it’s no longer acceptable to hand in the finished manuscript and expect the publisher to do the rest.

I think it’s fair to say that self-publishing attracts writers of a more entrepreneurial mindset. The flip-side of that is that those that remain in the traditional system may have a less entrepreneurial mindset.

I don’t mean this as a sleight, and I’m a little hesitant making this generalization, but I don’t think it’s too much of a stretch to say that the average self-publisher is more comfortable with the promotional aspect of publishing.

In addition, small publishers like Angry Robot, Samhain, and Ellora’s Cave have demonstrated a remarkable aptitude for connecting with readers through social media.

As more of the market moves online and to e-books, the importance of social media skills to selling books will become even more crucial. Large publishers (and their writers) will be up against a horde of smaller, hungrier, and more nimble competitors, whose writers will have the extra motivation of knowing that each sale earns them more money.

If you are paying someone twice as much per sale, they are going to work the room a little harder.

Amazon

The digital revolution is killing bookstores, and many of those that remain are downsizing their book displays. Amazon is hoovering up virtually all of the readers that shift to buying print books online, and well over half of those that switch to digital.

But Amazon doesn’t just threaten their grip on the print distribution network, it is also shaping up to be a major competitor on their home turf: publishing. Each dollar Amazon earns funds more of their aggressive expansion plans, including signing up a host of successful self-publishers to make a run on the bestseller lists.

And where the large publishers are weak (marketing), Amazon are very, very strong. They have millions and millions of email addresses. They know what those readers buy, how often they buy it, and if they ever read it. They know how likely a reader is to buy any given book, if displayed it while browsing. They can shift books like no-one else.

Writers who have signed to their imprints won’t just enjoy extremely favorable royalty rates (over triple what the large publishers are offering), an advance, an author-friendly contract, a digital version that is released when ready, and a print publication time that is unusually fast, they will also benefit from an unprecedented, targeted, digital marketing push.

The Future

Perhaps these are all areas which the large publishers could address. I often hear people say that it takes a long time for a big ship to turn around. However, what I’m seeing is a ship still heading in the wrong direction.

Large publishers are focusing on the wrong issues. They seem obsessed with piracy when their time, attention, and resources would really be better spent elsewhere.

In the UK, for example, the large publishers expended all of their political capital on the hopeless Digital Economy Act, enabling them to sue readers who have pirated books. They really would have been better off focusing on abolishing the crippling 20% VAT rate on e-books.

Amazon must apply the Luxembourg VAT rate of 15% to all sales in the EU, regardless of what country the consumer is actually in. Abolishing the VAT rate in the UK would have allowed them to undercut Amazon by 15% and sell through their own e-bookstores.

But they seem to have little interest in developing their own e-stores at all. I mean, most of them have an online store of some description, but they are clunky, the prices are way too high, and they don’t seem to really promote them. Most importantly, they haven’t captured any significant market share, and I don’t see that changing any time soon.

The decision not to compete in the retail sphere, the paltry rates they pay their writers, their inability to market direct to readers, and the continuing strengthening of Amazon is why I think the digital revolution poses a severe threat to the financial future of the large publishers.

What do you think? Will they turn it around?

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About David Gaughran

David is Irish and lives in Dublin, where it rains every day and conversation is a sport. He writes historical adventures and has helped thousands of authors to self-publish through his workshops, books, and this here blog.

40 Responses to Why The Digital Revolution Threatens Large Publishers

I don’t hold out much hope for the survival of traditional publishing. Like so many large, established “systems” they are so deeply invested in the system itself, they cannot see what it is they should actually be doing. They’re being crushed under their own weight. What trad pubs have always been notoriously bad at doing and what they are still bad at doing (with a few exceptions, Harlequin being one of them) is connecting with readers. They’ve left that to the authors and it is coming back to bite them.

“…In addition, small publishers like Angry Robot, Samhain, and Ellora’s Cave have demonstrated a remarkable aptitude for connecting with readers through social media…” All the focus on Amazon, but what about these guys? Amazon knows their real competition is coming out of garage-based businesses and sassy upstarts with big ideas. Trad pubs cannot grasp the notion.

I have a prediction. More and more strong selling authors will test the self-pub waters, but they will find either they do not have the aptitude for it or they don’t want to be publishers. Fair enough. But will they crawl back to NY and beg for a job? I don’t think so. I think they’ll seek out a happy medium. Publishers who do connect with readers and understand digital publishing. Having tasted the fruits of freedom and with a better understanding of the business side of publishing, authors will be smarter about contracts and the disposition of their rights and licenses.

If they’re smart, Big Six Publishers will follow in The Zon’s footsteps. They’ll pay attention to their readers. They’ll value their authors (or at least give them more money and better advertising). They’ll stop acting like idiots about ebooks.

“The paltry digital royalties offered by large publishers will become even more of a hot-button issue as more and more readers switch to e-books – which they will do this Christmas, in their droves.”

More than a few authors refuse to let the publishers release their backlists due to those paltry royalties. What happens when enough name brand authors feel they can do better on their own? That is the bit elephant in the room no publisher will discuss.

As you note, ereaders will become far more common this Christmas. We should see ebooks break 50% of the market in 2012 (well ahead of my ‘early 2013 prediction’). The question is when (not if).

David wrote: “For several years, the burden of promotion has been shifting to the author – it’s no longer acceptable to hand in the finished manuscript and expect the publisher to do the rest.

I think it’s fair to say that self-publishing attracts writers of a more entrepreneurial mindset.”

These two items are huge. As someone who has looked into setting up their own small business in a completely different realm, I’m finding the parallels are uncanny between what is going on in publishing and what it takes to setup your own small company. There is also this odd dynamic that seems to mirror the age-old debate of “getting a corporate job” vs. “starting your own enterprise.”.

I’m confused by the “Big SIx vs. Amazon E-Books” movie-style smackdown narrative I’m seeing. I don’t see it playing out like that at all.

All of those “Big Six Publishers” are partnering with Amazon to sell print books through its distribution mechanism and promotion mechanism, including e-books–just like self-publishers. Amazon keeps adding more publisher relationships–and most of those publishers (big and small) are offering e-book versions of every book they’re selling. They get it, and they have the know-how. They’re getting it more every day.

So: self-publishers AND corporate publishers are taking advantage of the new distribution models, but self-publishers are leaping into it more quickly.

And already, many of those self-publishers are proclaiming “victory”–but over what, I’m not sure. “Traditional” publishing? But while the victory party gets into swing, “traditional” publishing is being rapidly transformed before our eyes. It’s adapting, partnering, optimizing. It has the tools to do that, too.

I sure hope self-publishing stays an open and accessible paradigm for anybody looking to share their work. But it’s inevitable that the new distribution model will be colonized by large corporations, just like any other multi-billion-dollar industry. The pipe between writers and readers will not be democratized, it’ll be controlled and optimally monetized. Count on this: corporations will use social media just as much as self-publishers, and maybe better.

Will the options for self-publishers like me be better? I think so. But given the uncertain future, I want *more* options, not fewer. Amazon isn’t enough. The Kindle isn’t enough. I don’t think Amazon is democratizing publishing for me–they’re just offering me the use of their model for now–using their rules.

James, the problem self-publishers face is increasingly going to be platform as Amazon and other components of the mainstream control both the hardware on which people can eread and the operating systems with which they can read.

You also need to be publishing on PubIT and thru Smashwords for the the other marketplaces. As long as those exist, Amazon will not be able to change the rules too drastically.

I agree with you that the “victory” talk seems mis-placed. There will be plenty of authors who still want the mainstream deal even when they can’t make a living at it. I think the real issue is the distribution model. With shelf space shrinking and the end of the mainstream mid-list, the incentive to go to an agented/mainstream model becomes less and less attractive. Small press and self-pub indies will be leading the pack there as more and more of the book business goes online.

I would argue that mainstream is not adopting ebooks as widely or as universally as you think. This is particularly true in textbooks at the moment. There are 10x more paper only than paper-ebook combinations available on Amazon, for example, and when you start looking at categories like “paid fiction” – that’s under 300,000 titles the last time I looked.

In spite of that, the share that those titles commands is disproportionate to their numbers. Yes, the mainstream press demands higher cover prices — and sometimes they get them. In the long run, I don’t know if they can sustain that in the face of the downward pull of indie publishing that’s happy to price a whole line of books under $5.

Partially this will be due to bookstore closings and partially as ereader devices become either ‘there anyway’ (tablets/smartphones) or ereaders become cheap enough; such as the rumored $99 Kindle. The only catch is that in the USA a huge amount of the adoption, as with print book sales, happens in the mad rush to the holidays.

The big publishers are not ready for how fast customers will adopt ebooks over the next 30 months. This is going to make the transition from VHS to DVD look slow.

The problem I see with Amazon’s publishing and its sweepig up of successful self-publishers is that it’s not a sustainable model. The powerful impact of their promotional campaigns shows that – they will sweep up the current self-publishers, push them successfully, but if they succeed they’ll do so by sucking much of the air from the next generation of self-publishers. I think we need to wait a while to see how things are going to shake out from Amazon’s next step.

I’m not sure what the fate of big publishing will be. They may die. More likely they’ll contract and survive in a smaller form. But hey, I dont care. I can reach out directly to an audience and connect with readers. And that’s exactly what I plan to do!

Also, readers care most about a good story, not who publishes it. Self-pubbed stories that are good will increasingly cut into the sales of stories that aren’t so good but are being pushed by large publishers because they have a financial investment in them. The cream will rise to the top. Good for readers, good for writers, not so good for large publishers.

Yep, I agree with you David, the big publishers will go the way of the dodo with the bookstores as the digital revolution takes hold. It’s only a matter of time. I’m to the point where I am debating on whether or not to make a POD versions of my books at all. It seems like such a waste of trees when the real value of a book is in its content – the story. I also have a feeling paper books will carry a stigma someday – one that environmentally minded people will start.

I think the shift into digital is inevitable. Every aspect of our lives is already digital – our music, our movies, our social lives and pictures of our families, our college classes and work. The book world will not be immune to this change either. As soon as this change progresses, the need that authors have for big traditional publishers will diminish and many will go it on their own or they will go with a new age kind of publisher like an Amazon imprint or Ridan, to name a couple. The New York model is broken and I don’t believe it will ever be fixed or return to the way it was. The fact is that the power is shifting to the author and as long as the big tech companies compete with each other, it will remain this way. If one of the tech companies takes full control over the market, that would be another story but as for now, that hasn’t happened. Keeping my fingers crossed. =o)

“the real value of a book is in its content – the story. ”
I think print books have a lot of intrinsic value, and I have a feeling a lot of other people do to. And, if what you say is true, why not distribute all books without cover art of any kind?

“The fact is that the power is shifting to the author”
A test of that statement might be–would it still be true if Amazon weren’t selling the Kindle and offering self-publishers access to its distribution system? The only “power” authors have that they didn’t before is access to systems like Amazon, I think. Amazon holds complete power over distribution of your e-book, not you.

“I think print books have a lot of intrinsic value, and I have a feeling a lot of other people do to.”

A lot of people make this argument saying that print books will always be around because people like the feel of them, the smell of the pages as you crack open a freshly printed book, etc, etc. This is true, there are people who do like them but this is changing as e-readers become more and more popular and as the younger generation who grow up on e-readers get older. Print books won’t go away altogether but they will become a niche market like records or cassette tapes or any other kind of market that deals with items that have historical value.

“And, if what you say is true, why not distribute all books without cover art of any kind?”

What does this have to do with killing trees? Or did you mean that the cover art is not part of the story? The cover art *is* the story in a picture, at least, any good cover is. It is what introduces people at first glance to the content of the story.

“A test of that statement might be–would it still be true if Amazon weren’t selling the Kindle and offering self-publishers access to its distribution system?”

I don’t understand this argument. There are other e-book formats and many people are using those formats to read novels. If the Kindle didn’t exist and Amazon opened their distribution system to people, then it would become more like Smashwords, I think.

“The only “power” authors have that they didn’t before is access to systems like Amazon, I think. Amazon holds complete power over distribution of your e-book, not you.”

Is this true for JK Rowling? No. Is this true for any author who sells her/his books directly from their own websites, which many of them do? No. Is this true for authors who sell their books on B&N, Smashwords, or any other online bookstore besides Amazon? No. As long as the tech companies are competing with each other, the authors are the ones with the power because they are the content providers.

@Melisa: This is true, there are people who do like them but this is changing as e-readers become more and more popular and as the younger generation who grow up on e-readers get older.
I know quite a few who have adopted ereaders as there simply is not enough variety in large print books out there. Retirees have the time to read; ereaders provide the ability to read to many who have no other choice.

I expect the last ~15% of the book market to hold onto print for decades. For the rest, as I noted above, the next 30 months will involve change at a rate publishers are just not ready for.

I think the big elephant in the room that no one wants to talk about is that all writers are vulnerable because we may control the content, but we don’t control the medium or the distribution.
Publishers are not used to working at the speed of technology, they are used to working at the speed of print. Every time technology changes their paradigm will have to change. Their bottom line sucks a little drier (unless they cheat).
In some ways this actually gives the writer greater flexibility in the medium side. All we provide is content to whatever medium becomes available — that leaves distribution.
Distribution depends on growing distributors numbers and a non-standization of this distribution (i.e. every store can make it’s own rules). Because my guess is standardization will kill innovation — and possibly the indie.

But for now we live for today and by the looks of it today is a good day to go indie!

As an author, I’m an optimist about what all this portends for writers.

The combination of market competition and technology are undercutting the legacy publishing model at every juncture. Competition between low-tech bookstores and high-tech online sales is killing bookstores — which means: killing the main showcases and outlets for traditionally published print books. So what can traditional publishers do? They are supporting a huge infrastructure geared entirely toward print and bookstore sales. All that will shrivel away. So, what assets do they have left?

For one, a stable of authors, some of whom will continue to seek traditional “validation” at all costs (and the costs will be high). But what will that gain the traditional publishers? David is exactly right: “I think it’s fair to say that self-publishing attracts writers of a more entrepreneurial mindset. The flip-side of that is that those that remain in the traditional system may have a less entrepreneurial mindset.” Independence and creativity go hand-in-hand; entrepreneurial types also tend to be more creative and daring in their writing, too, and therefore more attractive to readers. Trad publishers will experience a “brain drain,” not unlike those closed societies that have discouraged entrepreneurship, as the more entrepreneurial writers head for the exits and seek new platforms, either with Amazon (e.g., Eisler, Konrath) or independently (e.g., Rowling).

What other assets do they have? Backlist — zillions of backlist titles. TAnd that’s a huge, untapped reservoir of wealth. But how to exploit this reservoir? Two ways: ebooks, and print-on-demand (P.O.D.) books. To compete with ebooks, they’ll either have to play ball with Amazon, or come up with a distribution method that can rival Amazon’s Kindle. It’s conceivable that they can withhold all that backlist from Amazon in order to compete. Then, to retain any segment of their print business, they’ll have to scuttle all the wasteful aspects of dead-tree publishing and go to P.O.D.

Whatever the outcome of these scenarios, we authors benefit through the competition. In the end, they all MUST compete for our creative output, and that means the pressure is on them to grant us Amazon-like terms. So, to me, all the signs and portents look positive for our future as writers

All markets are elastic to some extent. The power has switched from the publisher to the Author. The reader hasn’t given up any of their choice. Proof in the lack of publisher power is every author who now makes a living writing. Think of how few did so under the old system…

I’d say the e-book market is highly *inelastic*. See how fast the price race to the bottom took? There’s a very good reason why self-publishers see sales go up when they reduce to 99 cents–that’s the price point where most e-book consumers are willing to take a chance on something. $2.99? $4.99? Much, much less often.

And this is huge, I think, but I don’t hear many writers talking about it. It’s why I think the race to the bottom is not quite over–that it’ll hit *free* before it stops.

I don’t think all of the above spells the end for traditional publishing. I do think it means they face some difficult decisions to maintain their financial viability.

For example: do they continue to lose writers to self-publishing, progressive small publishers, or new outfits like Amazon, or do they increase their royalty rates? Both outcomes will affect them adversely, but neither will kill them.

I could see – maybe – one or two of the larger companies either going under or being swallowed up in a merger, but I don’t see them all disappearing. That’s simply not going to happen.

What I think we will see is a radical downsizing of a lot of companies. I think we will see lower advances, possibly in a trade off with higher royalties.

But the large publishers still have plenty of weapons – if they use them correctly. If I was a large publisher, there are lots of things I could do to stave off some of the threats outlined above. Here’s just some steps they could take:

1. Increase royalty rates (and use that to drive down advances further).
2. Start retraining the marketing teams to sell books online to readers, instead of offline to bookstore owners.
3. Hire in some social media help.
4. Hunt in the Kindle Store for successful indies (proactively).
5. Flood the market with backlist titles at $2.99 to kill off the rest.
6. Pour investment into an e-store, and slash the prices.
7. Try and push the market into investment-heavy areas where indies can’t compete like enhanced e-books and limited edition hardbacks.
8. Partner with a gaming company for enhanced e-books.
9. Forget about DRM and piracy.
10. Make better deals with their existing writers to publish their backlists.

However, most of the things on that list would seem to be the exact opposite of the approach they are taking right now.

I don’t think they will continue for much longer in the wrong direction – the market will eventually force a course correction upon them. But how much market share will they lose first? That’s the real question – not whether they will survive or not.

Oh, it’s just speculative. I would imagine it would make sense for larger publishers to try and push investment-heavy books like beautiful, limited edition hardbacks and enhanced e-books as the marketplace would be less crowded as only those with deeper pockets could finance this kind of publishing. Enhanced e-books right now would include things like video, music, or gaming elements. I would imagine the latter will develop as the e-readers and file formats do too. It would make sense to partner with a gaming company rather than trying to develop that capability from scratch. They could share the financial burden in exchange for a cut of the royalties and/or develop their own spin-off game. It could go any number of ways – just thinking out loud.

I’m researching the best way to break into the world of published books and your post is very helpful.It seems that traditional publishers can either choose to change their collective way of thinking or they can be left behind. As a writer that will soon seek publication I am leaning more and more towards the Indie publishers and e-publishing. Merely for the fact that it seems I can retain more control over my work and career. Thanks for posting. Great article and replies.

1. A large publisher (for which you will need an agent)
2. A small publisher (for which you usually don’t)
3. An agent/publisher hybrid
4. Self-publishing.

I’m not going to recommend one in particular other than to say it’s probably best to avoid the agent/publisher hybrids – at least until they provide more clarification about their business models, and they develop some track record of success.

As for the other three, educate yourself as much as possible, and then decide for yourself. Make a list of the pros and cons of going with a large publisher, a small press, and self-publishing, and then decide which path is most aligned to your goals.

This blog, obviously, is colored by my prejudices and perceptions, and I am a big proponent of self-publishing. Keep that in mind. Read widely. Read agents’ blogs. Read editors’ blogs. Read publishers’ blogs. Talk to other writers. Then see which path you are most comfortable with. And don’t stress to much about it. This is not a choice forever. You can always choose another path with your next book.

David writes “This is not a choice forever. You can always choose another path with your next book.” This may be true for self-publishing but many trade publishers actually include clauses in their contracts which not only contract you for one book, but you have to present your next book to them as well.
Some contracts I have seen (In particular UK contracts) may claim rights to the publishing rights beyond an author’s death. Beware of such contracts.
There is also one book for which there is no substitute or series of sequels – an autobiography.
Most people only have one of those.
Some people only ever write their life story and so I suggest for those who are seeking publication for their autobiography to think carefully about how they get it published.

“I know quite a few who have adopted ereaders as there simply is not enough variety in large print books out there.”
-Nell

What’s that? I thought there were more books in actual print than in ebook format. It’s like when DVD’s were taking over VHS and there were still more films on VHS because they hadn’t all gone to DVD yet.

There are several million more books in print in the US alone than in digital format. However, a lot of those are public domain titles – endless versions of Pride & Prejudice etc.

I think what they may have been referring to is indie books. In certain genres like horror, New York severely cut back on the titles published – thinking the genre dead -but indies filled the demand. You could say something similar about short stories, Westerns, and any number of micro-niches – indies can fill a void, especially for genres (or cross genre stuff) with limited demand. This leads to a great diversity of voices, subjects and themes.

Um, David, I know this is your blog, your page and I’m a guest here. But please don’t shoot us in the foot with this info on how to help publishers. We’re self published. We don’t need a floodgate of backlists to wash us out of the game, you know? We’re still trying to get a foothold because this whole thing is still pretty new. Right?

I think you have very little to worry about. First off, I’m sure they are thinking this way already, but are limited by other constraints. They don’t want to price backlists so low because they want to shore up print sales and they don’t want to add to the already existing downward pressure on e-book prices. They want to keep them high for as long as possible.

In fact, most of the things on that list would require a radical change of thinking (higher royalties, better terms for backlists, lower prices, no DRM etc.) that I can’t see it happening anytime soon. The rest they are probably working towards already.

What about the editorial value publishers provide? There will always be authors who think they don’t need editing, and those that, over the years, have learned (from a great editor) how to avoid the pitfalls that let down their writing – they can go more confidently go solo. But most authors seem to value the input they get from their editor – a perceptive structural or line edit is not easily come by. A bad editor can irreparably ruin what would have been a brilliant book and sometimes even a career.

I can’t see a vast brain drain of talent from big publishing companies unless the editors themselves also jump ship. Then the industry really would see a shake-up. But I don’t think we’re there yet. Editors tend to stay loyal to their authors and the companies they work for. Most aren’t in it for the pay, but for the talent they get to work with.

You’re right about the pressure to keep eBook prices high. I looked at some books at Kobo and Indigo (Kobo’s bricks and mortar partner) and the prices of paperbacks are trending at roughly 60% of the eBook price. I was scratching my head over that until I remembered you mentioning this in ‘Let’s get Digital’. Even understanding their motives, It still seems like they are selling their future to shore up the present.

Interesting article and thread. I’d like to toss in here that Amazon also did something when they started that really aggressively got them out there and established their brand above and beyond their competition. Their affiliate program, as far as ease of use and flexibility for linking content, simply is… without comparison. They are slowly shifting away from that; as someone who used to do book reviews (and a part of the revenue model based on Amazon.com affiliate commissions), I was often asked to write reviews on Amazon.com by publishers – which, of course, had to be done separately and don’t bring in commissions. But with an established brand, Amazon didn’t need the affiliates as much – and linking to non-Amazon reviews is a no-no.

Before you think I’m whining (I’m not), let me make my point: Amazon *transitioned*. They (1) Established their brand through viral marketing, (2) Invested in themselves and (3) Adapted to the market. They have effectively gone from the market wagging them to them wagging the market online. It’s pretty awesome what they did from a purely business perspective. It sucks for the little guys like me, but hey – it always sucks for the little guys. We just keep shooting in the hope that one day we become big shots ourselves.

Being a published author through O’Reilly – I think I might have sold 100 copies of an obscure eBook I worked on for a month (!) back in 2005 or so – I’ve seen the low commissions and so forth that come from poor marketing, etc. This is not to say that O’Reilly did a bad job – they were learning at the time how to do a better job (and I hope that this is the case now!) – and I had little clue myself at the time. While frustrating, it showed me (1) The value of a good editor who a writer can learn from if the ego subsides long enough and (2) that I didn’t need a publishing company to sell something for $x and I got 20% of $x. And I also learned that the process for getting eBooks published can limit the eBooks themselves; what I wanted to write couldn’t fit into anything but a series because of the publisher limitations on size – and the first part of the series was… well, I wrote it and I wasn’t pleased with it. But they were.

Meanwhile, a friend of mine wrote of his exploits in Haiti immediately after the earthquake, self published on Amazon, used social networking to market and is quite pleased with the sales. It apparently kept him in beans for a while.

The future will largely be self published, I think. The trick will be writers finding editors and vice versa. How will it affect large publishers? I don’t know. I’m not sure I actually need to care. At the end of the day, and particularly in a crappy global economy, the trend toward self interest of writers will fall toward self publishing. The old guard with their – no mistake – quality writers – will be around a while at least, but the incentive for writers who aren’t bestselling authors will likely be found in self publishing. And with the right incentives – something mentioned above a few times in other comments and the article itself – large publishing houses can snap up the writers that market themselves well in the ‘primordial ooze’ of self publishing and stay in business – or not.